Playlist: BME Spanish Exchanges

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Equity Update webinar: New highs — #SaxoStrats
Peter Garnry
12 October 2017 at 13:57 GMT
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Peter Garnry
03 October 2017 at 11:33 GMT
Koefoed: More downside for EURUSD ahead of ECB meeting
Mads Koefoed
14 April 2015 at 10:09 GMT
Koefoed: Why I'm bullish on Spanish equities
Mads Koefoed
07 April 2015 at 13:53 GMT
Garnry: My essential equity trades for Q1
Peter Garnry
08 January 2015 at 10:00 GMT
Portugal: Drama or a crisis?
Peter Garnry
11 July 2014 at 9:16 GMT
How Italy and Spain are showing some muscle
Peter Garnry
05 September 2013 at 10:15 GMT
Video / 04 October 2017 at 7:39 GMT

From the Floor: IBEX volatile as King Felipe weighs in — #SaxoStrats

   • US ISM non-manufacturing out at 1400 GMT, risk to downside
   • Weak dairy auction keeps AUDNZD support in place
   • Spanish King Felipe calls Catalan vote 'unacceptable disloyalty'
   • WTI crude 'at risk under $50/barrel': Ole Hansen
   • ECB bond holdings rise by €62.6bn in September

By Michael McKenna

Spain's key equities index is in a downward channel despite late-session strength Tuesday with uncertainty elevated as Madrid weighs its response to the Catalan vote held Sunday. King Felipe has stated that the ballot represents "unacceptable disloyalty" with Catalan leader Carles Puigdemont out saying that he will declare independence for the breakaway region within days.

Madrid's view is that the Spanish constitution forbids secession of any kind while Catalans are holding fast to self-determination as their democratic right. The developing crisis has attracted all manner of comment with the Serbian foreign minister out Tuesday accusing world leaders of a double standard insofar as they seem willing to reject the legitimacy of the Catalan vote nine years after accepting Kosovo's declaration of independence from Belgrade.

European Commission president Jean-Claude Juncker has been restrained on the matter, calling the constitutional crisis an "internal matter" for Spain.

Today's data calendar sees the US out with ADP jobs data at 1200 GMT and September ISM non-manufacturing release at 1400 GMT. These are the two key data points for today's session, says Saxo Bank head of equity strategy Peter Garnry with Saxo FX chief John Hardy adding that September's hurricanes point to a downside risk for the ISM result.

Elsewhere in FX, Hardy reports that the dollar is headed lower while SEK has caught a bid after Riksbank governor Stefan Ingves said Tuesday that moderate krona strength is acceptable to the central bank.


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Source: Saxo Bank 

In equities, risk-on remains the sentiment of the moment with Garnry pointing out the emerging market stocks remain sensitive to USD movements; in single shares, Tesla continues lower Tuesday as concerns over its new Model 3 outweigh a srong third quarter for its Models S and X.

Saxo Bank head of commodity strategy Ole Hansen says that oil volatility is elevated into today's US inventories data, particularly after API yesterday reported a 4 million barrel draw last week. In Hansen's view, WTI crude is at risk under $50/b with Brent looking at trendline and Fibonacci support just below the $54/b level.

Other factors to watch, adds Hansen, are the Libyan supply disruptions as well as ongoing uncertainty related to Kurdistan.

Gold, says Saxo's commodities head, is trading stronger on a soft USD while zinc prices are at a 10-year high.

For more on the this, as well as views on China, European bonds, copper, and the New Zealand dollar, listen to the Morning Call in full via the video above.

Madrid's opposition to Catalan independence remains implacable, but the breakaway region still appears poised to declare independence in the near future. Photo: Shutterstock

Michael McKenna is senior editor at Saxo Bank
Market Predator Market Predator
Hello Ole. Could you please unveil what area of industry is main consumer of Zinc? As I know, Copper is essential for all industry and very good general indicator of economy. Aluminium is key for Aerospace industry, Palladium and Platinum is key for Car exhaust system. And Zinc?
Moreover, as Zinc is pretty rarely traded (in my humble opinion) Saxo do not offer this metal in CDF Commodity nor Futures. Is it possible to use ETF ZINC:xlon as best proxy for Zinc, or is there Better instrument in Saxotrader?
Ole Hansen Ole Hansen
Hi MP- Zinc together with the other industrial metals of Aluminum, nickel, lead and tin mostly trade on the LME to which we currently don't offer access. Zinc's quality as an alloy is widely used in the galvanization industry where the mix of zinc and steel creates galvanized sheet used among others in the automobiles, construction, and shipbuilding industry. I attach the COT report from the LME which gives you and idea about positioning across the different metals.
The Zinc:xlon is the correct ETF but unfortunately the daily volume is pretty poor. The market maker function however should ensure enough liquidity but be aware of spreads widening during times of elevated volatility.
Market Predator Market Predator
Thanks Ole, perfect answer 👍


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